Banking

dogmas for the Assessment of Banks Management of Credit Risk A. Establishing an appropriate assurance insecurity environment Principle 1: The tabular armament of directors should cook office for affirmative and periodic solelyy reviewing the commendation seek strategy and significant credit risk policies of the bank. The strategy should think over the banks valuation account for risk and the level of profitability the bank expects to achieve for incur various credit risks. Principle 2: Senior caution should have responsibility for implementing the credit risk strategy approved by the plank of directors and for developing policies and procedures for secernateing, measuring, monitoring and controlling credit risk. Such policies and procedures should scratch credit risk in all of the banks activities and at both the individual credit and portfolio levels. Principle 3: Banks should identify and manage credit risk inherent in all products and activities. Bank s should ensure that the risks of products and activities unseasoned to them are subject to competent procedures and controls before being introduced or lowtaken, and approved in boost by the board of directors or its appropriate committee. B. Operating at a lower place a choke credit granting process Principle 4: Banks must operate under sound, well-defined credit-granting criteria.

These criteria should include a thorough understanding of the borrower or counterparty, as well as the purpose and structure of the credit, and its source of repayment. Principle 5: Banks should construct overall credit limits at t he level of individual borrowers and counte! rparties, and groups of affiliated counterparties that aggregate in a comparable and meaningful agency of life different types of exposures, both in the banking and trading accommodate and on and off the balance sheet. Principle 6: Banks should have a clearly-established process in place for approving new credits as well as the extension of breathing credits. Principle 7: All extensions of...If you want to get a full essay, auberge it on our website: OrderCustomPaper.com

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